Paselo Logistics, LLC, has filed for a state permit to mine anthracite on the 26-acre Huber Colliery property.

The application was filed with the Pottsville office of the Bureau of Mines “a few weeks ago,” according to Colleen Connelly, spokesperson for the Department of Environmental Protection. The filing is under review and that review will be a “thorough process,” she said.

Connelly said the application does not designate the exact area to be mined or the tonnage that Paselo expects to extract. “That is something we need,” she said.

The firm said it found coal and wants to mine, apparently using the strip mine method rather than digging shafts or reopening slopes. The method also must be reviewed, Connelly said.

Andy Kratz, Ashley Borough zoning officer, said no permit applications or any other documents have been filed with the municipality. Should Paselo seek to mine coal, Kratz said, it would require the approval of borough council.

The last coal mined in Ashley was some 400 tons taken by Lucky Strike Coal Co. in 1976 when it reopened a slope briefly. Lucky Strike was owned by Louis Beltrami, Hazleton. When his business failed, No. 1 Contracting Co. owned by Al Roman took possession. No. 1 in turn went bankrupt, losing the acreage and the historic Huber Breaker to Paselo Logistics late in 2013.

Roman lashed out at Paselo on Friday, claiming the supposed search for buried steel on the property is “a scam” designed to mask the intent to mine for anthracite.

“This is a dirty trick,’’ Roman said. “There is no buried steel.”

Roman said he dug a test hole about 10 years ago, going down 69 feet and finding no coal. However, he said he believes there is coal underground but he warned that mining would endanger the Earth Conservancy building on South Main Street.

Angelo Paselo of Paselo Logistics pulled up to his gate Friday just as Roman was talking to a security guard. Roman said Paselo asked him about possible coal deposits on the site.

Paselo later left, leaving the lone guard, from United American Security. The property has been locked for most of the last three weeks.

Last week, Attorney Jonathan Comitz, counsel for Paselo, said the company would use a magnet to search for buried steel.

“There is still steel in the ground that has to come out,” Comitz said.

The attorney attributed the shutdown to vacation time for Paselo workmen.

Roman has remained focused on the Huber property despite losing it, flying over it monthly in a helicopter to create a photo record. Roman has fired off letters to the U.S. Bankruptcy Court lamenting the destruction of two search-and-rescue trailers that No. 1 Contracting created. He said Paselo sold them “as junk.”

Roman said Paselo has not cleaned up the site as claimed. He pointed to piles of tires on the property. He has asked the court for copies of any fines imposed on Paselo related to the demolition work.

Phone messages seeking comments were left for Comitz and Paselo on Friday.

Comitz said last week Paselo has no plans for use of the 26 acres on which the Huber Colliery and breaker stood. The land is zoned industrial.

Luzerne County Redevelopment Authority owns an adjacent 46 acres. Kratz said that land was rezoned to residential.

Paselo bought the Huber property in a Bankruptcy Court proceeding for about $1.3 million, covering the property, closing costs and taxes The Philadelphia-based company began razing the structure in May and within one month it was gone, its steel sold for scrap value.

Paselo Logistics LLC wants to do surface mining to remove an initial 250 tons of coal from the Huber Colliery property in Ashley. The coal and additional coal refuse would then be tested to determine its quality.

The application for a state permit to mine anthracite was filed by Premium Fine Coal Inc., which lists an address of P.O. Box 268, Tamaqua, on behalf of Paselo Logistics.

Premium Fine’s application, filed with the Pottsville office of the state Bureau of Mines on July 21, remains under review, according to Colleen Connelly, spokeswoman for the Department of Environmental Protection.

Premium Fine Coal said the purpose of the program is “to determine the extent and quality of the coal refuse and stripping coal …’’ that might be found at the Huber site. Testing would be done at the laboratory of Hawk Mtn. Labs Inc., Hazle Township.

The firm said its equipment roster would include a drill rig, backhoe, bulldozer, front-end loader and trucks. The digging would aim to determine the extent of coal reserves, coal quality and coal refuse pile recoverability, the application states.

Working on about one acre, Premium Fine would trench or drill to obtain the coal refuse and stripping coal samples, the application states. No trenches would remain open overnight and disturbed areas would be graded.

“The area will be stabilized (either on a temporary or a permanent basis) within 20 days of the most recent earth moving activity (weather permitting),” according to the application.

Premium Fine wants 250 tons of coal and 2,500 tons of refuse as “a representative sample.’’ The proposed digging or drilling area has been affected by abandoned surface mining activities, the application states.

Existing roads will be used and there will be no disturbance within 300 feet of existing buildings, the application states, and no adverse environmental impact is expected.

Hawk Mtn. Labs boasts of 30 years of experience in testing organic material. It does coal testing to determine “fuel combustion characterization,’’ according to its website.

The application to mine includes a consent form signed by Angelo Franco, who is listed on the Paselo Logistics website as a member of the management team, giving Premium Fine authority to enter onto the 26.5 acres “to engage in surface mining activity …’’

A portion of the acreage is in Hanover Township but the mining would be done in Ashley Borough. No permit applications or any other documents have been filed with Ashley. Should Paselo seek to mine coal, borough zoning officer Andy Kratz said. Mining would require the approval of borough council, he said.

The last coal mined in Ashley was some 400 tons taken by Lucky Strike Coal Co. in 1976 when it reopened a slope briefly. Lucky Strike was owned by Louis Beltrami, Hazleton. When his business failed, No. 1 Contracting Co. owned by Al Roman took possession. No. 1 in turn went bankrupt, losing the acreage and the historic Huber Breaker to Paselo Logistics late in 2013.

Roman, of Drums, said he dug a test hole about 10 years ago, going down 69 feet and finding no coal. However, he said he believes there is coal underground but he warned that mining would endanger the Earth Conservancy building on South Main Street.

Water in the Huber workings was found at about 90 feet in depth testing done by the Eastern Pennsylvania Coalition for Abandoned Mine Research.

The Huber property has been locked for most of the last three weeks and gates remained locked and under guard on Tuesday.

Paselo Logistics has announced no plans for the 26 acres. The land is zoned industrial.

Luzerne County Redevelopment Authority owns an adjacent 46 acres. Kratz said that land was rezoned to residential.

Paselo bought the Huber property in a Bankruptcy Court proceeding in November, 2013 for about $1.3 million, covering the property, closing costs and taxes The Philadelphia-based company began razing the structure in May and within one month it was gone, its steel sold for scrap value.

ASHLEY — Borough officials and residents aren’t happy about what’s going on with the former Huber Colliery site on Main Street.

Allegations that surfaced at Tuesday’s council meeting include that the new owner of the former Blue Coal processing property haven’t paid back taxes, didn’t remove asbestos before tearing down the breaker and now plan to strip-mine the property.

Philadelphia-based Paselo Logistics LLC was the sole bidder for the property at a bankruptcy court proceeding in November 2013. Representatives from the company did not attend Tuesday’s meeting.

Paselo bought the Huber Colliery site for approximately $1.3 million, which was supposed to cover closing costs and taxes as well as the purchase of the property itself.

But Ashley is still owed about $11,000 and the Hanover Area School District is also owed back taxes, borough Solicitor Bill Vinsko said. He said the borough and school district plan to send a joint letter to find out the status of the money.

Recently, Premium Fine Coal Inc. of Tamaqua applied for a state permit on behalf of Paselo to mine anthracite at the Huber Colliery property. Paselo wants to remove 250 tons of coal to test its quality before doing further surface mining. Surface mining, or strip mining, involves removing layers of soil to dig up coal, as opposed to deep mining, which involves tunneling underground to get at coal seams.

Councilman Frank Sorokas said he took a walk on the Huber property and found it a mess, with holes all over.

“The place is a total disaster. It looks like a bombing in Syria, honestly,” he said. “They need to repair that land.”

Sorokas stated his opposition to strip mining. When asked by a resident how other members of council felt about it, Councilman Joseph McGlynn Junior said, “Two million percent against it.”

Besides getting a permit from the state, Code Enforcement Officer Andy Kratz said Paselo still has to come before council in order to start mining.

The company razed the Huber Breaker in May and sold it for scrap. The last building on the property, the powerhouse, came down in August.

Resident Ralph Laiuvara showed council a photo of the demolition and asked why there was asbestos in the buildings.

Asbestos must be removed before demolition, Laiuvara said, noting, “You should have abated this before it even started.”

Kratz referred him to the state Department of Environmental Protection, which he said is in charge of the situation. Paselo did get demolition permits from the borough, Kratz said.

However, Laiuvara was not satisfied. He asked where the documentation is from DEP, and accused Kratz of not doing his job and shutting down the demolition.

“Asbestos all over. Flying all over Ashley,” he said.

Laiuvara and McGlynn got into an argument over whether the asbestos at the site was non-friable — meaning it can’t be crumbled or reduced to powder under hand pressure — and what should have been done about it.

“We’ve been trying to get a meeting with DEP,” McGlynn said. “Don’t put the blame on the zoning officer.”

Starting in May and ending in August, the company tore down all the buildings at the site, to sell for scrap metal.

DEP requires a 10-day notice of demolition and a plan to control dust, which includes asbestos, Connolly said.

As the Huber Breaker buildings were torn down, Paselo had Wilkes-Barre-based CCM Contracting, a certified asbestos removal service, to monitor and clean up, Connolly said. CCM Contracting was there every day doing ambient air monitoring and handling the asbestos as the demolition was going on, and reported to DEP, she said.

“The reason the building was allowed to be demolished without removing the asbestos first was that the borough had condemned the Huber Breaker and it was too dangerous to let anyone inside,” Connolly said. “They certainly wouldn’t let anybody in there if it’s dangerous.”

But Ashley council President Donald Sipple said Paselo bought the property with the understanding they were tearing down all the buildings, and that the borough never condemned the breaker.

Sipple said Code Enforcement Officer Andy Kratz would not issue demolition permits without the required DEP dust control plan.

Connolly said DEP has not heard from Ashley Borough officials about a meeting, but does plan to reach out to them.

Sipple said borough officials plan to follow up and request information from DEP.

BY ELIZABETH SKRAPITS, STAFF WRITERPublished: October 20, 2014The partnership formed to purchase the Huber Breaker has apparently soured, with the partner who provided the financing suing the others.

In a suit filed in federal court last month, Reivia Ashley LLC accuses Philadelphia-based Paselo Logistics LLC of stealing money and scrap metal from the former coal processing site and is asking to get the money back — and for Paselo to stay off the property.

Reivia Ashley LLC, based in Wyckoff, New Jersey, and solely owned by Ronald Garner, was supposed to get all the money from the Huber Breaker project first, but the funds were diverted by Paselo Logistics, according to the lawsuit.

Reivia Ashley LLC is asking for an injunction to stop Paselo Logistics from taking anything else from the Huber Breaker and an accounting of all property removed from the site, and is seeking in excess of $150,000, plus fees and costs.

Garner’s attorney, James Golden of Philadelphia, said the essence of any breach of contract complaint is that one party says the other party isn’t doing what they promised to do.

“Whatever we wrote in the complaint is what our claims are,” he said.

A trial is scheduled for July 20 in federal court for the eastern district of Pennsylvania, provided the two parties don’t settle their differences first.

“I approach all my cases with the expectation that there will be a trial,” Golden said.

Paselo Logistics was formed by Angelo Franco and Pasquale Scalleat of Philadelphia “to service the steel demolition and recycling needs of the east coast market,” according to the company’s website, www.paselologistics.com. The website also notes that “In October 2013 Ronald Garner joined Angelo and Pasqualle as a consultant and provided financing for the acquisition of the Huber Ashley Coal Breaker.”

Scalleat’s sister, Maria Scalleat of Hazleton, was also involved in the company and did its bookkeeping.

Attorney Nino V. Tinari of Philadelphia, who is representing Franco and the Scalleats, was out of the state on unrelated legal business and was unavailable for comment.

According to the lawsuit:

In the spring of 2013, Franco approached Garner about a new scrap metal business he was working on with Pasquale Scalleat and discussed the idea of buying the 25-acre Huber Breaker property.

The property’s owner went bankrupt and it was up for auction.

Over the next few months in 2013, Garner visited the Huber Breaker property with Franco, Pasquale Scalleat “and possibly others” to talk about entering into business together and to assess the potential value of steel on the property.

Paselo Logistics and Reivia Ashley forged a loan agreement in May 2013. In October 2013, Paselo Logistics bought the property at bankruptcy court for $1.27 million; Reivia Ashley loaned $1.2 million to Paselo to complete the purchase.

Under the terms of the agreement, Reivia Ashley was to receive interest of 3 percent per year and half the profit from the sale of the scrap metal, which, it was estimated, would bring in about $5 million.

After all the scrap metal was sold, Reivia Ashley and Paselo Logistics would sell or develop the land, possibly mining coal or selling the mineral rights.

An application filed with the state Department of Environmental Protection indicates the company intends to mine 250 tons of stripping coal to determine the extent of the coal reserves.

The lawsuit continues:

Reivia Ashley was to have full control over all money received from the property.

In the beginning, the parties got cash for selling equipment left at the site. Later, they sold scrap metal from demolishing the structures.

Garner would visit the site at least once a week to collect the money, depositing it in a joint account with Pasquale Scalleat. Revenue checks, when they cleared, would be transferred to another account Garner used to pay approved bills and repay the loan.

“To date Paselo Logistics has reported collecting a little less than $1,800,000 in equipment and scrap revenue and almost all the steel structures are gone,” the suit states.

As the buildings at the site were being demolished and the steel shipped out, Garner started to wonder if the amount of steel expected to come from the job was accurate. He also became concerned that Franco and Pasquale Scalleat didn’t have proper control over expenses. They had already exceeded the $800,000 budget for expenses before the job was complete.

“The financial concerns caused Garner to ask more questions about the operations of the job,” the suit states.

In late spring, Garner asked to see the bank statements to see whether the expense checks he was writing matched up with actual expenses. Garner alleged Franco and Pasquale Scalleat refused him access to the joint account until he threatened to get his attorney involved.

Garner spent about two hours reviewing the account on Aug. 25, and discovered ”several disturbing deposits from several vendors to which Paselo Logistics sells steel as well as a few large deposits going in and out of the Paselo 1 account (one for $197,000).”

Two days later, Garner met with Pasquale Scalleat to tell him what he had found.

“Scalleat said he was shocked and knew nothing about what Garner was describing,” the suit states.

In May, Garner had given Maria Scalleat a signed blank check on the Reivia Ashley account to cover unexpected expenses. He stopped payment on that check on Aug. 26, the day after he had reviewed the joint account. Three days later, the bank manager notified Garner that someone was attempting to cash or deposit a check on the Reivia Ashley account in the amount of $100,000 — the same blank check Garner had given Maria Scalleat in May. The bank is investigating.

In his brief review of the joint account, Garner discovered nine checks totaling more than $50,000 from vendors who purchased scrap steel from Paselo Logistics — checks that should have been deposited in a different account. Garner also discovered 60 checks totaling more than $300,000 payable to Maria Scalleat and Pasquale Scalleat, signed by Pasquale Scalleat and Maria Scalleat.

“While it is possible that some of these checks are legitimate, it is not possible that most of them are,” the suit states.

Garner also discovered a check signed by Pasquale Scalleat, written on the joint account to P S Capital Ventures, a company owned by Pasquale Scalleat, the lawsuit says. Garner stated in the suit that he does not know of any legitimate reason for the check.

“From the amount of steel sales far less than expected, the apparently diverted revenue, the stolen check and the attempt to steal $100,000, it is almost certain that Mr. Franco, Mr. Pasquale and Ms. Pasquale are stealing money and steel from the project. It is almost certain that in addition to the diverted money, they are selling steel and not depositing the receipts even in (the joint account),” the suit states.

“If Mr. Franco, Mr. Pasquale and Ms. Scalleat are not prevented from all activities at the Huber Breaker site and the Paselo Logistics operation, they will continue to steal money and steel, and it may be close to impossible to determine how much they stole,” the lawsuit states.

Joined: Fri Jul 15, 2005 2:34 pmPosts: 6906Location: Within 60 Miles of the Northern Anthracite Field

BY ELIZABETH SKRAPITS, STAFF WRITERPublished: October 21, 2014The state Department of Environmental Protection filed two violations against Paselo Logistics LLC for work at the Huber Breaker in Ashley.

However, the company did bring the demolition operation at the former coal processing site up to compliance and did not have to be fined, DEP reports. In addition, Paselo is allowed back at the Huber Breaker site now that a restraining order against the company was lifted.

After an inspection in January, DEP sent Paselo a notice of violation on Feb. 12 for “Failure to comply with the United States Environmental Protection Agency standards for hazardous air pollutants,” such as asbestos, benzene, beryllium, radon and mercury.

Specifically, “the conveyor and enclosed walkway were demolished without an Asbestos Abatement and Demolition/Renovation Notification Form.”

DEP spokeswoman Colleen Connolly said Paselo did not file a required 10-day notice with the department’s Harrisburg office.

“That form would explain to us how they intended to handle the demolition,” she said.

The form has to provide contact information for the asbestos removal contractor. It also has to include the estimated amount of regulated asbestos containing material or the procedure employed to detect the presence of any asbestos at the site.

DEP sent Paselo another notice of violation on May 7 for “Failure to take reasonable actions to prevent particulate matter from becoming airborne.”

Connolly said the violation was for not controlling dust during demolition.

“Basically they did not water down the dust. No civil penalty was issued,” she explained. “This was not related to how they handled the asbestos.”

Paselo did send DEP plans for the powerhouse, which contained the most asbestos at the site, Connolly said.

The plan, submitted by Newark, Delaware-based Batta Environmental, indicates piping containing asbestos was stripped using canvas tarps, after first being wet down. The asbestos was to be “bagged and double bagged and labeled” and “disposed of in an approved landfill.”

The boilers were to be left until last, then cleaned up and the dirt surrounding the back end of the building, where they were located, “covered with the canvas tarps as to minimize any asbestos contamination with the soils surrounding the power house.”

During the demolition, Batta Environmental did the air monitoring, working with CCM Contracting of Wilkes-Barre, which handled the asbestos removal. CCM was on site every day of demolition to remove asbestos, and air quality monitoring was set up downwind on days when contractor felt the monitoring was necessary, Connolly said.

DEP found no violations during an Aug. 1 inspection. The powerhouse, the last building to be demolished, came down that month.

In September, Reivia Ashley LLC, based in Wyckoff, New Jersey, and solely owned by Ronald Garner, filed suit in federal court against Paselo Logistics, which is based in Philadelphia and consists of Angelo Franco, Pasquale Scalleat and Scalleat’s sister, Maria Scalleat of Hazleton.

The suit alleges Paselo Logistics stole money and scrap metal from the Huber Breaker site, and asked for the diverted money to be paid back and for Paselo to stay off the property.

But a temporary restraining order issued Sept. 5 was removed on Sept. 30, and Judge R. Barclay Surrick refused Reivia Ashley’s request for an injunction to keep Paselo off the site.

Attorney Nino V. Tinari, representing Paselo Logistics, said an agreement was reached that allows the operation to continue, with restrictions. The only issue remaining is the underlying lawsuit, he said.

Paselo applied to DEP for a mining permit to determine how much coal is left at the Huber Breaker site.

Although it may seem as though mining is already underway, that is not the case, according to Connolly. It’s just some site remediation after the demolition.

“There’s also some soil there they have to get rid of,” she said. “They’re not mining.”

Connolly said the lawsuit will not affect the mining permit application.

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